ALERT – 1031 Now Targeted for Repeal
We will continue to closely monitor the situation to keep you informed while also maintaining our efforts to educate Congress. As we continue to fight for Section 1031, we need your assistance. Elected officials listen more closely to their constituents! In addition to sending electronic letters, below is something you can do to help with the Section 1031 advocacy efforts:
Talk with your contacts about preserving Section 1031. Below are the comments the FEA shared with members of Congress about Section 1031 (see our PDF). Please feel free to use them in your conversations with colleagues, friends, and representatives.
Section 1031 is an important tool used by business owners, farmers and ranchers, middle-class taxpayers, and others to transition into locations that more efficiently meet their needs, instead of being tax-locked into obsolete assets.
The proposed repeal is misguided because larger investors are critical to repurposing and renovating commercial real estate in our post-pandemic economy. The COVID-19 pandemic imposed unexpected and unprecedented trauma on commercial property – particularly retail, hotel, and office space. A significant percentage of these properties need to be repurposed.
These are the types of large-scale projects that revitalize entire neighborhoods, generate significant job growth, and result in widespread community improvement. Section 1031 is an effective tool to encourage this activity while avoiding market disruptions. Allowing businesses to continue to utilize Section 1031 prevents many assets from becoming shuttered blight.
Additionally, recent economic impact studies concluded that Like-Kind Exchanges are a powerful stimulant of transactional activity that, in addition to the benefits described above, generates significant local and Federal tax revenue and contributes to the health of the U.S. economy. The studies found that exchanging buyers make real estate investments that are substantially greater than non-exchanging buyers, resulting in improved communities in which to live, work and play. These studies quantified that limiting or repealing Section 1031 would cause significant economic contraction and job loss.
Most importantly, under Section 1031, taxes are merely deferred, not eliminated!
Thank you for your help in IPX1031’s advocacy efforts. We will keep you updated with additional information as it becomes available.
READ MORE
Talking Points PDF (2024)
Why Like-Kind Exchanges in a Distressed RE Market Make a Difference PDF (2023)
Sustaining American Businesses During Economic Uncertainty brochure
Ernst & Young Study Summary (2022)
Ling and Petrova Study Summary (2021)
IPX1031 Tax Reform resources
